World Trade Organization panel to hear oral arguments on Australia tobacco plain packaging case from 28 to 30 October 2015

27 October 2015

Tuesday 27 October 2015

Tomorrow a World Trade Organization (WTO) dispute settlement panel will begin to hear a second and final round of oral arguments in claims that Australia’s tobacco plain packaging infringes WTO agreements. The hearing will take place at WTO in Geneva from 28-30 October, 2015. An initial oral hearing took place 1-5 June 2015.

The outcome of this case is being watched worldwide by governments, health organizations and tobacco companies alike given the crucial nature of plain packaging as a tobacco control measure. Fiercely opposed by the tobacco industry, plain packaging is recommended by guidelines under the World Health Organization Framework Convention on Tobacco Control, the international tobacco control treaty.

Under plain packaging, health warnings would remain as would product names in a standard size and font, but tobacco company colours, logos and graphics on packages would be banned. The brand portion of package have the same colour (e.g. drab brown) for all brands. Tobacco packages would no longer be mini-billboards promoting tobacco.

Plain packaging was implemented in Australia in 2012, has been adopted in Ireland and the United Kingdom for implementation on 20 May 2016, and is under formal consideration in Norway, Sweden, Finland, Hungary, France, Canada, New Zealand, Singapore, Turkey and South Africa. [1]

There are four complainants that have each brought a claim to WTO: Honduras, Indonesia, Cuba and Dominican Republic. (Another initial complainant, Ukraine, has withdrawn its legal claim). At the October 28-30 hearing, it is only the four complainants as well as Australia that will be entitled to present oral argument.

Tobacco companies have admitted to paying legal costs for two of the current complainants: Philip Morris International for the Dominican Republic, British American Tobacco for Honduras as well as for the previous complainant Ukraine. [2] At WTO, only governments can initiate proceedings, which is why the tobacco industry is paying legal costs of certain countries.

There are 36 Third Parties that are participating in the proceeding, more than in any previous WTO case. The Third Parties were entitled to present their perspective at the June 1-5 hearing, but will not be able to do so at the October 28-30 hearing. The Third Parties are: Argentina, Brazil, Canada, Chile, China, Chinese Taipei, Ecuador, Egypt, European Union, Guatemala, India, Japan, Korea (Republic of), Malawi, Malaysia, Moldova, Mexico, New Zealand, Nicaragua, Nigeria, Norway, Oman, Panama, Peru, Philippines, Russia, Saudi Arabia, Singapore, South Africa, Thailand, Trinidad and Tobago, Turkey, United States, Uruguay, Zambia, Zimbabwe.

The tobacco industry had previously brought a constitutional challenge in Australia to plain packaging, but this was dismissed by the High Court of Australia on August 15, 2012. [3]

Deborah Arnott, Chief Executive of health charity ASH said:

“The claim that Australia’s tobacco plain packaging infringes WTO agreements is ill founded and has little or no chance of success. The sooner all the legal challenges are settled the better. Then the example set by Australia, and followed by the UK and Ireland, will rapidly spread all round the world.”

ASH has been given permission to intervene in the legal challenge brought by tobacco companies to try to stop the introduction of standardised, plain packaging in the UK. The case is due to be heard from 10-17 December. [4]

The importance of plain packaging was recently emphasized by WHO Director General Dr Margaret Chan at the World Conference on Tobacco or Health [5]: “Despite industry’s best efforts to block plain packaging, the train has already left the station. The evidence base is strong, empirical, and comes from well-qualified, respected, and credible sources. I thank all the researchers who have contributed to this evidence base. We know that plain packaging works.”

[3] JT International SA v Commonwealth of Australia [2012] HCA 43, High Court of Australia, Order August 15, 2012, Reasons October 5, 2012.
The WTO case is not the only ongoing legal proceeding regarding plain packaging. In Australia, Philip Morris International has brought a further legal proceeding under a Hong Kong-Australia bilateral treaty. In Europe, tobacco companies have commenced legal proceedings against Ireland and the United Kingdom regarding plain packaging requirements in those countries.

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